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Old 11-26-2011, 05:05 AM
 
Location: Long Island, NY
19,713 posts, read 12,186,229 times
Reputation: 5615

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Quote:
Originally Posted by SamBarrow View Post
If you're trying to judge economic policy, I think it's perfectly reasonable to discard government employment stats. The economy could be in the crapper, and the government could hire every single person in the country creating 0% unemployment, but that wouldn't change the fact that the economy was in the crapper.
That's just false. If the government hired all the unemployed bringing unemployment to 0%, that would have ended the depression. Those millions of workers hired would have received pay tat they spent their pay to purchase items that created demand and multiplied through the economy. That demand would have brought idle factories to full capacity.

The problem is that while the WPA and CCC programs worked, their scale was limited but did help reverse unemployment.

Quote:
Originally Posted by BigJon3475 View Post
No, I'm saying you're arguing that command economies work. MTA is saying command economies work. Every person arguing that FDR didn't prolong the GD is saying command economies work.
I was silent on "command economies," which I interpret as government controlling the entire production of factory output, farm output, deciding what goods are made, etc. What the right argues is that using the government, at all, to improve anything in the economy amounts to a "command economies," which is false.

Quote:
Originally Posted by BigJon3475 View Post
The GD would have lasted a few years at best and people would have gone back to work had FDR not intervened every step of the way. The robust growth wasn't turning the economy around. It technically brought the US out of depression but that's merely a measure of if money is changing hands or not. People weren't working in the private sector nearly in the amounts that are need to bring about real and sustained growth. What brought about that was WWII and a War Economy.
These facts are wrong.

There wasn't "robust growth" until FDR intervened. Unemployment was getting worse; GNP had halved since 1929 and the nation was experiencing deflation. Looking at graphs, like the ones below, and conclude that FDR made it worse requires a strong set of ideological blinders.




Last edited by MTAtech; 11-26-2011 at 05:21 AM..
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Old 11-26-2011, 05:30 AM
 
6,137 posts, read 4,337,564 times
Reputation: 1513
Quote:
Originally Posted by MTAtech View Post
That's just false. If the government hired all the unemployed bringing unemployment to 0%, that would have ended the depression. Those millions of workers hired would have received pay tat they spent their pay to purchase items that created demand and multiplied through the economy. That demand would have brought idle factories to full capacity.
Really? So if the government puts everybody to work digging ditches and then filling them back up with dirt, that makes us a prosperous nation? Employment by itself means absolutely nothing if everybody's poor. If you're talking long term economic policy like I said, what matters is GDP and private sector employment.

And you kind of contradicted yourself there. You said those workers would have created demand and therefore created employment - private sector employment. That's what matters at the end of the day, and you just reinforced that point.

Can we agree that the ultimate end goal is private sector employment? Because if we can agree on that, then we should also be able to agree that when judging outcomes we should look at how close we've gotten to that goal.

Let me phrase this simply: You're arguing that since A can lead to B, that when we are judging B, we can substitute A for B? Even if A is not in fact leading to B in this instance? Because if A were leading to B, the point would be moot. I can't go with that.

Last edited by rw47; 11-26-2011 at 05:44 AM..
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Old 11-26-2011, 05:53 AM
 
Location: Long Island, NY
19,713 posts, read 12,186,229 times
Reputation: 5615
Quote:
Originally Posted by SamBarrow View Post
Really? So if the government puts everybody to work digging ditches and then filling them back up with dirt, that makes us a prosperous nation? Employment by itself means absolutely nothing if everybody's poor. If you're talking long term economic policy like I said, what matters is GDP and private sector employment.

And you kind of contradicted yourself there. You said those workers would have created demand and therefore created employment - private sector employment. That's what matters at the end of the day, and you just reinforced that point.

Can we agree that the ultimate end goal is private sector employment? Because if we can agree on that, then we should also be able to agree that when judging outcomes we should look at how close we've gotten to that goal.
On private vs public employment: It doesn't matter at all who gives you a paycheck. A teacher, policemen, meat inspector and firefigher is every bit employed as a butcher, baker and candlestick maker and their value to society is equally valuable.

This notion of the right that only private sector workers produce value is silly. As Kruman writes:
Quote:
Economics, as I say often, is not a morality play. As far as creating aggregate demand is concerned, spending is spending – public spending is as good as but also no better than private spending, spending on bombs is as good as spending on public parks.
...
there’s the general fear on the part of conservatives that if you admit that the government can do anything useful other than fighting wars, you open the door to do-gooding in general; that explains why conservatives have always seen Keynesianism as a dangerous leftist doctrine even though that makes no sense in terms of the theory’s actual content. On top of that there’s the Kalecki point that admitting that the government can create jobs undermines demands that policies be framed to cater to all-important business confidence.
...
The moral here should be that spending to promote employment in a depressed economy should not be viewed as something that has to generate a good financial return; in effect, most of the resources being used are in reality free.
Moreover, apart from conservatives rejecting Keynesianism outright, they're more than willing to accept it when they're in charge. This is from the right-wing Weekly Standard:
Quote:
Which brings us to the economic level. The deficits that Bush ran up in the years in which the country was teetering on the verge of a serious recession had the beneficial effect of righting the economy. In that sense, deficits not only didn't matter, but were a force for economic good.
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Old 11-26-2011, 06:01 AM
 
6,137 posts, read 4,337,564 times
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Quote:
Originally Posted by MTAtech View Post
On private vs public employment: It doesn't matter at all who gives you a paycheck. A teacher, policemen, meat inspector and firefigher is every bit employed as a butcher, baker and candlestick maker and their value to society is equally valuable.
I know that, but you're missing my larger point. You can argue one of two things.

1. FDR enacted good economic policy that led to a strong private sector.
2. FDR gave people jobs.

If you're arguing 2, fine, you are correct. But anybody can tell the government to hire workers. That's not some profound feat. And it obviously did not lead to a strong private sector for damn near 10 years.

Then the war comes around, more keynesianism, putting people to work making bombs that we then explode over Europe (broken window fallacy). Now, do you think that it was this particular keynesian boost that led us to the prosperous era of the 50s alone, or did it have more to do with the fact that we had just flattened the rest of the industrialized world therefore destroying supply while creating demand that only we were capable of fulfilling?

Edit - Re weekly standard, I don't buy their theory any more than I buy any other similar theory. Bush ran up deficits blowing up bombs in deserts halfway across the world. Again, textbook broken window fallacy. Now perhaps he did provide some type of boost, but hell in that instance I'd prefer FDR style keynesianism, infrastructure, etc. At least we got some direct (as opposed to indirect, as in a jump start type of thing) benefit out of that.

Edit Again - And let me make it clear that I am not some knee jerk conservative who thinks that the government trying to boost the economy will necessarily be a failure. I do believe keynesianism has some validity but again only as a jump start.

Edit Again Again - I completely glanced over that Krugman part. As a righty I don't think that every public sector job is automatically a waste. It all comes down to productivity, I really don't give a damn who's behind it. I do however believe that on average the private sector is much more efficient. And on top of that, every dollar that goes into the public sector has to be taken out of the private sector. I also believe that the broken window fallacy is one of the most overused and ridiculously stupid things to ever impact economic policy (I say this because we are talking about wars).

Last edited by rw47; 11-26-2011 at 06:12 AM..
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Old 11-26-2011, 06:07 AM
 
Location: Columbus
4,878 posts, read 4,055,696 times
Reputation: 1448
Quote:
Originally Posted by MTAtech View Post
That's just false. If the government hired all the unemployed bringing unemployment to 0%, that would have ended the depression. Those millions of workers hired would have received pay tat they spent their pay to purchase items that created demand and multiplied through the economy. That demand would have brought idle factories to full capacity.
Nonsense. If that were the case we could pass a law that says no goods can be delivered using airplanes, trains or 18 wheelers. Everything must be delivered in an automobile. This would lower unemployment to 0% overnight. Would the economy be in good shape?

And where would the government get money to pay these people? They couldn't pay all these people without completely destroying the value of money.

Either way you are wrong.

P.S. The government did hire virtually all the unemployed for WW2. The Depression didn't end until AFTER the war. So now I just proved you wrong again.
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Old 11-26-2011, 06:13 AM
 
Location: Columbus
4,878 posts, read 4,055,696 times
Reputation: 1448
Quote:
Originally Posted by MTAtech View Post
On private vs public employment: It doesn't matter at all who gives you a paycheck. A teacher, policemen, meat inspector and firefigher is every bit employed as a butcher, baker and candlestick maker and their value to society is equally valuable.

This notion of the right that only private sector workers produce value is silly. As Kruman writes:

Moreover, apart from conservatives rejecting Keynesianism outright, they're more than willing to accept it when they're in charge. This is from the right-wing Weekly Standard:
Again. Total nonsense.

Fact is we don't know something is of value without a profit/loss mechanism. The private sector businessman knows he is creating something of value and doing it efficiently when he turns a profit. He knows he isn't when he turns a loss.

The government has no such function (which is why they create monopolies for themselves). Most govt economic decisions are based on politics. And without a profit/loss mechanism there is no way to tell if they are adding value.

And more than half the country leans to the right. 2-3 guys at the Weekly Standard don't speak for all of them.

There is also no good/service "provided" by government that hasn't been provided by the private sector more efficiently and at a cheaper cost.
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Old 11-26-2011, 06:17 AM
 
6,137 posts, read 4,337,564 times
Reputation: 1513
Quote:
Originally Posted by OhioIstheBest View Post
Again. Total nonsense.
I think he has a point with this one. You can't be an absolutist and say that the public sector does absolutely nothing productive. Police and firefighters do provide value to society. You can however say that the private sector is X% more efficient on average. And I'd substitute a pretty high number for X.
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Old 11-26-2011, 06:28 AM
 
1,963 posts, read 1,640,658 times
Reputation: 844
Why was bush elected twice if he was the Antichrist people make him out to be?

Answer: The stupidity of the average American voter.
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Old 11-26-2011, 06:30 AM
 
Location: Columbus
4,878 posts, read 4,055,696 times
Reputation: 1448
Quote:
Originally Posted by SamBarrow View Post
I think he has a point with this one. You can't be an absolutist and say that the public sector does absolutely nothing productive. Police and firefighters do provide value to society. You can however say that the private sector is X% more efficient on average. And I'd substitute a pretty high number for X.
I'm saying the private sector can do it better. Fact is without a profit/loss system we can't tell how productive the police and firefighters are. Would crime drop if the criminal justice system were privatized? Would fewer people die in fires? That's not to say that public police/fire depts can't or don't do a decent job. We just can't tell how effective they really are.
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Old 11-26-2011, 06:40 AM
 
Location: North Beach, MD on the Chesapeake
35,233 posts, read 45,236,432 times
Reputation: 45624
Quote:
Originally Posted by OhioIstheBest View Post
Again. Total nonsense.

Fact is we don't know something is of value without a profit/loss mechanism. The private sector businessman knows he is creating something of value and doing it efficiently when he turns a profit. He knows he isn't when he turns a loss.

The government has no such function (which is why they create monopolies for themselves). Most govt economic decisions are based on politics. And without a profit/loss mechanism there is no way to tell if they are adding value.

And more than half the country leans to the right. 2-3 guys at the Weekly Standard don't speak for all of them.

There is also no good/service "provided" by government that hasn't been provided by the private sector more efficiently and at a cheaper cost.

My experience in local government is the opposite. Every single formerly governmental function (trash collection, inspections, police services (contract with the County Sheriff's Department), janitorial) we privatized has in the long term ended up costing more after the initial contract period when the governmental infrastructure has been dismantled.

Trash collection is now 40% more than when we collected it ourselves. Sold the equipment which has now skyrocketed in cost to replace.
Inspections we took back after the intial contract (cut from $50/hour private contractor down to $22/hour, hired the employee and he got a raise, had been making $20/hr with the private firm).
Police services $100K/year/officer extended cost vs. $78K/year with our own department. Same situation as with trash while adding in training.
Janitorial services doubled in cost since town employees were doing them in the regular course of their duties.
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